The Pew Charitable Trusts by pengxuezhi


									                                        The Pew Charitable Trusts
                                                 Global Warming Power Nexus

                                                            by Ron Arnold
    Summary: The Pew Charitable Trusts
recently became a public charity. The
change in legal status will enable the
multi-billion dollar foundation to take
an even more active role in advocating
sweeping policies to combat the alleged
global warming threat. These policies,
such as carbon taxes, would entail wrench-
ing changes in the American people’s
standard of living.

T        he Philadelphia-based Pew Chari-
table Trusts is one of the nation’s largest
and most influential philanthropic founda-
tions. The Pew Charitable Trusts are actu-
ally an interlocking set of seven trusts
established by the children of turn-of-the-
century oil baron Joseph N. Pew, and stew-
arded by the family’s private investment
bank, the Glenmede Trust Company, which
is the trustee of the seven charitable trusts.
Glenmede manages $14 billion of total Pew        Former Clinton Administration official Eileen Claussen is president of the
family wealth, about $4 billion of which
                                                 Pew Center on Global Climate Change.
belongs to the Pew Charitable Trusts.
                                                 consists of nine employees. Pew’s staff is
     The first Pew Trust, the Pew Memorial       overseen by a 15-member board of direc-
Trust, was established in 1948. In 2002, the     tors; about half are Pew family members.           May 2004
seven trusts reported $3,753,638,080 in
assets and total giving of $238,534,822.             Pew has been a leading donor to en-            CONTENTS
The charitable programs are managed sepa-        vironmental groups for nearly two de-
rately from Glenmede, which has its own          cades. Its Environment Program, directed     The Pew Charitable Trusts
CEO and is referred to as “the bank.” The        by Joshua S. Reichert, gave 31 grants in             page 1
charitable trusts are led by President and       2002 totaling $39,493,500—the program’s
CEO Rebecca Rimel. Pew Charitable Trusts         environmental giving has averaged more          Philanthropy Notes
has a professional staff of 144 and a public     than $30 million annually for a decade.               page 8
affairs staff of ten. By contrast, the entire    Since 1990, Pew Charitable Trusts has
staff of the Annenberg Foundation, which         given over $300 million to more than 100
has an endowment comparable to Pew’s,            environmental groups.
Foundation Watch

    The primary mission of the Environ-         others, and noted for its concen-           fossil fuels. Despite that obstacle, Pew’s
ment Program, according to Pew docu-            tration on climate change issues;           well-planned global warming strategy and
ments, is “to reduce the generation of                                                      vast wealth have made it the prime mover
greenhouse gases that contribute to glo-        • $2,927,500 (1992-2002) to the             of the environmental movement’s campaign
bal warming.” It shows in Pew’s heavy           Union of Concerned Scientists,              to phase out fossil fuels.
donations to groups with substantial cli-       an outspoken critic of fossil fuels.
mate change campaigns:                                                                      The Energy Foundation: Pooling
                                                 These and many other beneficiaries         the Resources of Environmental
    • $19,046,000 (1995-2002) to            join Pew in demanding that the U.S. must        Grantmakers
    Earthjustice Legal Defense Fund         adopt the severe energy cuts called for by           Pew didn’t achieve that pivotal status
    (formerly the Sierra Club Legal         the 1992 United Nations Framework Con-          alone. Part of Pew’s strategy isleveraging,
    Defense Fund), which files nu-          vention on Climate Change (http://              the “never act alone” approach that builds
    merous lawsuits involving indus-, and its 1997 Kyoto Proto-        coalitions of like-minded donors and cre-
    trial emissions;                        col. The protocol targets carbon dioxide as     ates new entities to attack the problem from
                                            the chief greenhouse gas that is allegedly      many angles. Even a determined founda-
    • $11,568,000 (1991-2000) to Natu-      causing temperatures to rise worldwide. It      tion with a nearly $4 billion endowment
    ral Resources Defense Council           would require the United States to reduce       acting by itself would be hard pressed to
    (NRDC) and $6,353,413 (1990-            its CO2 emissions to seven percent below        consolidate the environmental movement’s
    2000) to Environmental Defense,         1990 levels, while imposing no restrictions     energies into a concerted global warming
    two leading global warming op-          on major developing nations.                    campaign.
                                                 The principal mission of Pew and its            Thus, in 1991, Pew joined with two
    • $24,000,000 (1998-2002) to Strat-     climate change grantees is to persuade the      other giant philanthropies, the John D. and
    egies for the Global Environment,       media, policymakers and the American            Catherine T. MacArthur Foundation ($4.2
    Inc., parent corporation of the         public to accept Kyoto’s CO2 limits. Since      billion assets 2001) and the Rockefeller
    Pew Center on Global Climate            1988, even before the U.N. Convention           Foundation ($2.6 billion assets 2001), to
    Change;                                 and Kyoto, Pew has given grants that help       create a single-purpose consortium that
                                            develop political and communications            argues against fossil fuels: the San Fran-
    • $31,896,000 (1995-2002) to the        strategies to spread the global warming         cisco-based Energy Foundation. They were
    National Environmental Trust, a         message. Pew’s aim: to choreograph the          joined within a few years by four other
    media outlet created by Pew and         politically feasible steps necessary to move    foundations, including the powerhouses
                                            the U.S. away from the use of fossil fuels—     David and Lucile Packard Foundation ($6.1
Editor: John Carlisle                       coal, oil, and natural gas—despite the se-      billion assets) and the William and Flora
                                            vere disruption it would cause to the           Hewlett Foundation ($5.1 billion assets).
Publisher: Terrence Scanlon                 economy and the serious lifestyle decline       Today the Energy Foundation has some
                                            it would force upon the American people.        $50 million of its own in the bank and its
Foundation Watch
is published by Capital Research                                                            seven constituent foundations list over
Center, a non-partisan education and             According to estimates prepared by         $23 billion in combined assets. This con-
research organization, classified by        the U.S. Energy Information Administra-         glomerate is critical to Pew’s success as
the IRS as a 501(c)(3) public charity.      tion (EIA), U.S. ratification of the U.N.       the pre-eminent climate change leader.
                                            climate treaty would cause gasoline prices
1513 16th Street, N.W.                      to rise from 14 to 66 cents per gallon by the        The Energy Foundation (2002 assets
Washington, DC 20036-1480                   year 2010. Electricity prices would increase    $48.9 million; 2002 grants $14.4 million)
                                            in the range of 20 percent to 86 percent.       describes itself as “a partnership of major
Phone: (202) 483-6900                       And the U.S. economy would lose $400
Long-Distance: (800) 459-3950                                                               foundations interested in sustainable en-
                                            billion in GDP annually. An independent         ergy”—fossil fuels are conspicuously ab-
E-mail Address:                             study commissioned by six African-Ameri-        sent from its agenda. Its 2002 annual report               can and Hispanic organizations found that       observes, “reliance on fossil fuels endan-
                                            the treaty requirements would likely put        gers public health, jeopardizes national
Web Site:                                   864,000 black Americans and 511,000 His-                                                              security, and constrains sustainable eco-
                                            panics out of work.                             nomic development.”
Foundation Watch welcomes letters
to the editor.                                 Regardless of one’s opinion on global             The Energy Foundation’s grant
                                            warming, one thing is certain: the technol-     amounts, about $90 million from 1997 to
Reprints are available for $2.50            ogy simply doesn’t exist to support a
prepaid to Capital Research Center.                                                         2001, are less significant than its total fo-
                                            modern industrial economy based on non-         cus on non-fossil fuels. Many Energy Foun-

2                                                                                                                          May 2004
                                                                                               Foundation Watch

                   New Tax Status Allows Pew to Aggressively Lobby for
                    Economically Draconian Anti-Fossil Fuel Policies

        The Wall Street Journal said in an unsigned editorial, “Beginning this year, the Pennsylvania-based
  Pew Charitable Trusts changed their legal status from private foundation to public charity.

         “Here’s the catch: Pew argued that its seven trusts should be counted separately to fulfill the charity
  requirement demonstrating broad public support. Incredibly, both the IRS and the Pennsylvania Attorney
  General agreed—even though these seven trusts are centrally administered and share the same executive

          “Pew’s new status frees it up to spend money directly, to raise even more money, and to devote up to
  5% of its annual $200 million budget to lobbying. That’s a lot of K Street lunches.”

          It’s actually more than that. Public charities usually follow the so-called “20-and-5” lobbying rule:
  spend no more than 20 percent of the organization’s annual revenue for direct lobbying (group influences
  legislators) and spend no more than 5 percent for grass roots lobbying (group urges others to influence legisla-
  tors). Groups are subject to an excise tax if they spend more than permitted, and can lose their exempt status if
  they exceed the permitted amounts by more than 50 percent over a 4-year period.

          So, following the IRS “20 and 5 rule,” the 5 percent is only the grass roots portion of the allowance
  (Pew gets others to influence legislators); Pew can now spend 20 percent for its own direct lobbying (Pew
  influences legislators). $40 million a year might even buy the K Street restaurant.

         WSJ quoted the Foundation Management Institute’s Neal B. Freeman: “It’s the perfect vicious circle.
  With this tax change, trusts that were set up with money from the Sun Oil Company will now be used to lobby
  for a Kyoto Treaty whose primary victims will be America’s energy companies.”

dation grants promote conservation mea-      fossil fuel and toward renewable energy       broad array of social change programs that
sures such as efficient appliances and ve-   power plants.”                                help inject global warming messages into
hicles, or the development of biomass,                                                     science, art and culture. A junior member,
wind, solar and fuel cell energy sources,         To grasp the Energy Foundation’s         the McKnight Foundation ($1.5 billion
but a substantial number of grants merely    actual impact, it is necessary to factor in   assets 2002) has its Environment Program
oppose fossil fuels. For example, the pur-   the targeted programs of its seven origina-   and gave total grants of $86.9 million in
pose of a $27,000 grant to the Sierra Club   tors. The Pew Charitable Trusts ($238 mil-    2002. The smallest member, the Mertz-
Foundation in 2001 was stated as: “To        lion grants 2002) has its Environment Pro-    Gilmore Foundation, has an Energy Pro-
enact administrative state regulations and   gram; the MacArthur Foundation ($179          gram devoted entirely to the Energy Foun-
policies emphasizing renewable, rather       million grants 2002) has its Program on       dation, and gave total grants of $4.3 million
than fossil fueled, forms of distributed     Conservation and Sustainable Develop-         in 2002.
generation.” Similarly, a $30,000 grant to   ment; the Packard Foundation ($349 mil-
CALPIRG (California Public Interest Re-      lion grants 2002) has its Science and Con-        A few highlights illustrate who these
search Group) Charitable Trust was: “To      servation program; the Hewlett Founda-        grants influenced, some high profile, oth-
launch a statewide field campaign during     tion ($194 million grants 2002) has its En-   ers virtually unknown, but all acting in
the summer of 2001 to steer the public       vironment Program; the Rockefeller Foun-      concert to spread the global warming mes-
debate about energy policy away from         dation ($129 million grants 2002) has its     sage:

May 2004                                                                                                                              3
Foundation Watch

    • Hewlett Foundation grants: $1.3          grants include: the Energy Foundation           on a long journey” whose unstated desti-
    million to Environmental Defense           ($200,000-2001; $250,000-2000); W. Alton        nation is to phase out fossil fuels, a sen-
    (1994-2001); $1 million to NRDC            Jones Foundation, Inc. ($50,000-1999);          timent echoed throughout the environ-
    (1990-2001); $475,000 to the Si-           Oxford Foundation, Inc. ($50,000-2002); the     mental movement and among its many
    erra Club (1998-2001); $250,000 to         David and Lucile Packard Foundation             foundation donors.
    World Resources Institute in               ($280,000-2002); Turner Foundation
    1995.                                      ($150,000-2000); and Wallace Global Fund              But Pew recognized early on that such
                                               ($73,000-1999).                                 a draconian agenda – especially given the
    • MacArthur Foundation grants:                                                             lack of viable fuel alternatives — would
    $6.5 million to Natural Resources               Center president Eileen Claussen is a      not sell on Main Street America. To make
    Defense Council (1988-2001); $3.5          talented and shrewd leader with an impres-      its program politically feasible, the
    million to Environmental Defense           sive background. For six months in 1997         Center’s work must be incremental and
    (1992-2001);       $615,365     to         she was the Clinton Administration’s As-        optimistic. Center president Claussen re-
    Greenpeace (1997– 2001); $601,000          sistant Secretary of State for oceans and       peats the kickoff campaign’s tone with
    to the Sierra Club (1994-1997).            international environmental and scientific      boilerplate speeches like one she gave to
                                               affairs (the Senate did not confirm her; she    the Environmental Council of the States in
    • Packard Foundation grants:               was a recess appointment); before that          2003. Claussen assured listeners “that
    $12.3 million to Environmental             Special Assistant to President Clinton and      there are many actions that can be taken
    Defense (1993-2002); $2.2 million          Senior Director for Global Environmental        with no negative economic impact, and
    to the Sierra Club (2000-2002);            Affairs at the National Security Council        that, with careful planning and execution,
    $769,000 to NRDC (1988-2001).              from 1993 to 1996; and more than 20 years       and with continued technological devel-
                                               at the US Environmental Protection              opment, we can address this problem and
    • Pew Charitable Trusts grants:            Agency.                                         still have a growing global economy.”
    $6.3 million to U.S. Public Interest
    Research Group (1997-2001); $4.4                She launched the Pew Center with a               To bolster that message, the Pew Cen-
    million to the National Religious          big television and print advertising cam-       ter publishes numerous reports, including
    Partnership for the Environment            paign. It featured the logos of 13 prominent    a 2003 document,U.S. Technology Policy
    (1993-2001); $1.8 million to World         corporations and the cheery message that        and Lessons for Climate Change. It re-
    Resources Institute (1988-2002).           we can cope with climate change and keep        mains vague on the issue of what exactly
                                               both the environment and the economy            to do about fossil fuels. “In the case of
    • Rockefeller Foundation grants:           healthy. The ads ended with the tagline:        climate change, the main problem
    $1 million to World Resources In-          “Climate change is serious business for all     is...carbon dioxide... which is released by
    stitute (1993-2001); $285,000 to           of us.”                                         burning natural gas, coal, and oil and fuels
    NRDC (1989-1999); $100,000 to the                                                          the world’s economies,” writes Edward S.
    National Religious Partnership for             Neither the ad campaign nor the 13          Rubin, the report co-author. “(Carbon di-
    the Environment in 1993; $20,000           supportive corporations said anything           oxide) from fuel combustion is a major
    to Greenpeace (1996-2001).                 about phasing out fossil fuels, and all 13      source of global warming, along with a
                                               were totally dependent on fossil fuel en-       number of other greenhouse gases that
     The synergism of this network means       ergy. The kickoff campaign was followed         are metered in smaller amounts... In order
the public opinion impact of the whole is      by a stream of technical papers, meetings       to stabilize the atmospheric levels of (car-
greater than the sum of its parts, even        and press releases, all emphasizing green-      bon dioxide) and other greenhouse gases,
though the headlines feature only those        house gas emissions and “reasonable regu-       major long-term changes in the way we
who got the money and not those who            latory measures,” but none discussing the       use energy will be needed and will be
gave it.                                       agenda to phase out fossil fuels.               essential.” Rubin did not describe the
Pew Center on Global Climate                        The Pew Center’s publicity statements
Change                                         acknowledged that the climate change                 Another Pew Center report, Are Un-
     The Pew Trusts’ leveraging strategy       debate is steeped in contentious technical      certainties in Climate and Energy Sys-
created another new entity in 1998: the        argument. Its IRS “exempt purpose” is “le-      tems a Justification for Stronger Near-
Pew Center on Global Climate Change. The       gitimizing the issue of global climate change   term Mitigation Policies? (2001), talks
Trusts created the Center with a $4.27         and establishing it as one requiring signifi-   about “transition,” presumably to the
million startup grant and has invested more    cant and sustained action by industry, the      much-vaunted “hydrogen economy,” but
than $24 million in the Center to date. Pew,   public and the United States government.”       says nothing specific. It does say that
in keeping with its network-building style,    However, Pew’s ultimate goal is starkly         “such a transition would require the adop-
convinced a half dozen other foundations       clear. Claussen says repeatedly that the        tion of strong policies, e.g., carbon taxes,
to contribute another $8 million. Recent       Kyoto treaty “is at best a modest first step    tradable emission rights, regulations on

4                                                                                                                            May 2004
                                                                                                   Foundation Watch

energy efficiency, transfer payments to        rector of investment house Lehman Broth-       only the latest addition to the Pew environ-
deal with distributional inequities, en-       ers. Another influential Strategies board      mental movement network. There is a long
hanced R&D on new energy technolo-             member is Leslie Carothers, president of       track record behind it.
gies, politically acceptable and cost-ef-      the Environmental Law Institute (ELI) in
fective sequestration techniques, etc.         Washington, D.C., where Eileen Claussen        Pew’s Evolution: Political Agenda
There will be winners and losers, and fair     is a member of the board. For eleven years     Betrays Founder’s Beliefs
burden of sharing of transition costs.”        Carothers was vice president for environ-           Pew Charitable Trusts has drawn fire
But co-authors Stephen H. Schneider            ment, health and safety at United Tech-        from critics for abandoning the intent of the
(Stanford University) and Christian Azar       nologies Corporation, manufacturer of jet      original donors. In his book The Great
(Chalmers University of Technology) stay       airliner engines. Board member Frank E.        Philanthropists and the Problem of ‘Do-
vague about policy outcomes and costs.         Loy also serves on the Environmental           nor Intent,’ Martin Morse Wooster cites J.
(Who are the “winners” and “losers”?           Defense board and was President Clinton’s      Howard Pew’s purpose in establishing the
What is the shared burden and what makes       Under Secretary of State for Global Af-        J. Howard Pew Freedom Trust in 1957: to
it “fair”?)                                    fairs.                                         acquaint the American people with “the
                                                                                              evils of bureaucracy,” “the values of the
    The Pew Center also cultivates sup-             The Pew Center’s board has embraced       free market,” and “the paralyzing effects of
port for its message with high-level con-      every congressional bill controlling CO2 to    government controls on lives and activi-
ferences. In league with the Aspen Insti-      date: the 1998 Chafee-Lieberman Senate         ties of people.”
tute—a non-profit group of mostly busi-        bill giving companies credit for early CO2
ness and finance executives—the Pew            reductions; the similar 2002 Hagel-                 Since the current executives took over
Center held a March 2004 conference titled,    Voinovich Senate bill; the high-profile 2003   in the mid-1980s, you won’t find the Pew
“A Climate Policy Framework: Balancing         McCain-Lieberman Senate cap-and-trade          Trusts acquainting anyone with anything
Policy and Politics,” that advocated the       bill; the 2003 Byrd-Stevens Senate mea-        like that. “The political ghosts of Pew’s
U.S. adoption of Kyoto treaty restrictions.    sure establishing a White House CO2 czar;      past are gone,” according to Pew president
                                               and the 2004 Gilchrest-Olver cap-and-trade     and CEO Rebecca W. Rimel. For example,
     The “Pew Center on Global Climate         House bill.                                    in 1994, the Pew Trusts helped create a
Change” is actually a name with no legal                                                      media outlet called Environmental Strate-
standing: it’s not a 501(c)(3) group listed        But Pew and the environmental move-        gies (re-named the Environmental Informa-
in IRS Publication 78, the government’s        ment have suffered some stunning set-          tion Center and now known as the National
cumulative index of all exempt organiza-       backs. In 1997 the U.S. Senate unanimously     Environmental Trust), which sponsored, in
tions. The corporate organization receiv-      refused to ratify the Kyoto treaty and in      the words of the National Journal, a “bare
ing the $4.27 million Pew start-up grant is    March 2001, shortly after taking office,       knuckles paid-media campaign” to defeat
Strategies for the Global Environment, Inc.,   President George W. Bush reaffirmed the        Congressional deregulation. Thus, J.
an umbrella group for the Pew Center on        federal government’s opposition. The           Howard Pew’s foundation helped to pay
Global Climate Change and for a second         President’s position was clear and certain:    for ads stating that the “new Congress” is
Pew-initiated group called the Center for      “I oppose the Kyoto Protocol because it        “bedding down with corporate polluters,”
SeaChange. The latter group was created        exempts 80 percent of the world, including     yet, as Philanthropy Roundtable noted,
in 2003 from an earlier project under the      major population centers such as China         “he built the fortune that became the Pew
Strategies umbrella, the Pew Oceans Com-       and India, from compliance, and would          Trusts by being precisely the kind of per-
mission.                                       cause serious harm to the U.S.                 son vilified in those ads.”
                                               economy. The Senate’s vote, 95-0, shows
     Strategies      for     the    Global     that there is a clear consensus that the           In 1998, the Philadelphia Inquirer
Environment’s $4.27 million start-up grant     Kyoto Protocol is an unfair and ineffective    quoted former Pew program director Kevin
did not come directly from the Pew Chari-      means of addressing global climate change      Quigley as saying, “The donors would not
table Trusts but was passed through the        concerns.”                                     only be rolling in their graves these days,
Energy Foundation, which states that the                                                      they would be gyrating at very high speeds.”
grant was made, “In support of an initia-           In 2002, the Bush Administration again
tive aimed at encouraging the U.S. to re-      thwarted the Pew Trusts when it offered its         They would likely be dismayed that
duce the emission of greenhouse gases          own plan based on voluntary guidelines to      not only had their legacy shifted far left of
that are contributing to warming the earth’s   deal with emissions. The Pew Center’s          center, but it had also become arrogant in
climate.”                                      Claussen responded with a New York             its charity, putting forward strategic goals
                                               Times op-ed characterizing the president       to be achieved, calling its gifts “invest-
     Strategies for the Global Environment,    as a “climate change dropout.”                 ments,” and expecting a return on its in-
Inc. has an eleven-member board of direc-                                                     vestment in the form of measurable social
tors. The chairman of the Strategies board        The Pew Center on Global Climate            change results.
is Theodore Roosevelt IV, managing di-         Change, high profile as it has become, is

May 2004                                                                                                                                 5
Foundation Watch

     Philanthropy Roundtable in 2002 re-          grants that directly or indirectly oppose fos-    Yorker article, social critic Dwight Macdonald
ported that Pew’s changes were “raising           sil fuels.                                        dubbed this writing style “foundationese.” It
concerns over a kind of imperial over-                                                              appears importantly in the description of $4.2
stretch that has led largely unaccountable             In 1988, as NASA’s James Hansen was          million worth of grants (1997-1998) Pew gave
foundations to inject themselves into the         warning the U.S. Senate of the dangers of         to Boston’s Clean Air Task Force (CATF), a
governing process and dream up projects           global warming, the Pew Charitable Trusts         group skilled in filing lawsuits against fossil
rather than support the work of existing          gave the University of California at Santa        fuel users. The description stated: “for Clean
organizations.”                                   Barbara $120,000 to study “the impact of          Air Task Force’s efforts to accelerate retire-
                                                  climate change on northern temperate forest       ment of nation’s most polluting coal and oil-
     Pew has spread that kind of “imperial        reserves,” Pew’s first climate change grant.      fired power plants.”
overstretch” to many other foundations.           The grant also illustrates how the issue of
Inventing projects and finding                    climate change can impinge upon virtually              What it didn’t say was that it targeted
grantseekers willing to perform them has          anything: the air goes everywhere, forests,       540 older power plants that produce 51 per-
become so common that it even has a name          farms, cities, deserts, oceans.                   cent of America’s electricity. Accelerating
in the jargon of the trade: “prescriptive                                                           their shutdown—and some are being mod-
grantmaking.” That means the foundation                In 1991, Pew helped fund the 1992 U.N.       ernized instead—would leave the nation with
writes the prescription for social change         Framework Convention on Climate Change            an electric energy gap of disastrous propor-
and grant recipients make it happen. It also      with a $90,000 grant to the World Resources       tions. So the fine-sounding “foundationese”
means that if there’s no existing organiza-       Institute in Washington D.C. “to promote          mischaracterizes the real situation.
tion suitable to fill a particular prescrip-      international convention on climate change
tion, the foundation will create its own          in which world’s major nations will agree to           Funneling grants through third-parties
surrogate, as with the Energy Foundation          take specific actions to reduce threat of glo-    is another Pew strategy that widens its power
and the Pew Center on Global Climate              bal warming, as well as to design policies for    network and expands its influence. The CATF
Change.                                           meeting carbon dioxide reduction goals in         grant went to New York’s Pace University
                                                  U.S.”                                             Law School to support the activists’ law-
    Pew’s president Rebecca Rimel is un-                                                            suits. Another $3.4 million Pew grant went to
abashed about her programs “injecting                  With the offer of big grants, environ-       Pace in 1999 “to reduce harmful air emissions
themselves into the governing process.”           mental groups quickly discovered they were        from nation’s electrical power plants.” Alto-
She once famously told a University of            deeply interested in the role of fossil fuel as   gether the Pew Trusts gave Pace $8.1 million
Pennsylvania audience, “Philanthropic             a cause of global warming. Soon the Trusts        for anti-fossil fuel projects.
foundations are sometimes criticized for          gave these grants:
having a social agenda. Well, you know                                                                    CEO Rebecca Rimel discussed what is
what? They’re right!”                                 • $100,000 to the Center for Innova-          perhaps Pew’s most astute grantmaking strat-
                                                      tive Diplomacy (1991);                        egy in a May 2002 interview with Philan-
     Pew’s “imperial overstretch” raised                                                            thropy Roundtable magazine: “We can be
more concern in January 2004 when its                 • $150,000 each to Natural Re-                smart about what we do—we can be what I
original IRS tax status as a private founda-          sources Defense Council (1992), the           call ‘raging incrementalists,’ by which I mean
tion was changed to “publicly supported.”             Environmental Defense Fund (1992)             we can be very focused and very strategic
That meant the $4 billion endowment would             and the Southern Environmental                and use resources, ideas, individuals, and
be allowed to lobby. (See Box on page 3)              Law Center (1998, 1999);                      institutions out there to move the needle on
                                                                                                    certain key issues.” That’s a long way of
Pew Trusts Funding History                            • $200,000 to the Delaware Valley             saying “be demanding about getting to your
     The Pew Charitable Trusts has long               Citizens Council for Clean Air (1998);        goal a little at a time.” Rimel’s “raging incre-
opposed fossil fuels, which is an odd way                                                           mentalism” is best reflected in the Pew net-
to honor the philanthropic intentions of              • $320,000 to the National Religious          work-building strategy of recruiting busi-
members of the Pew family who founded                 Partnership for the Environment               ness leaders to the climate change cause,
the Sun Oil company, a major oil producer             (2001);                                       which has become a specialty of the Pew
and refiner. Joshua Reichert, the powerful                                                          Center on Global Climate Change.
director of Pew’s Environment Program,                • $325,000 to the Center for Energy
once told me his goal for the 90,000-job,             Efficiency and Renewable Tech-                Co-opting Big Business: The
$161 billion U.S. coal industry. It was simple:       nologies (1998)                               Business Environmental Leader-
“buy them out.” This was in a personal                —all for global warming-related projects.     ship Council
conversation after our debate at an Octo-                                                                To implement its upbeat little-by-little
ber 2002 annual meeting of the Society of              Some Pew grant descriptions use am-          strategy Pew has assembled a thirty-eight
Environmental Journalists. But his remark         biguous and sanitizing language of a type         member “Business Environmental Leader-
gives perspective on Pew’s long record of         that has drawn critical comment; in a New         ship Council” (BELC) to carry its message.

6                                                                                                                                    May 2004
                                                                                                      Foundation Watch

Pew, the Energy Foundation and the Turner       had no real alternative.                          The 2003 McCain-Lieberman “Climate Stew-
Foundation spent $400,000 to organize the                                                         ardship” bill (S. 139) is a “cap-and-trade”
council from 1998 to 2000.                           What’s in it for BELC members? Their         scheme that gives companies credit for early
                                                endorsements won’t mollify the environmen-        reductions in emissions. That’s the formula
      BELC members have included Lord John      tal community. Greenpeace hasn’t stopped          for creating the American segment of a global
Browne, group chief executive of British Pe-    protesting BP efforts to develop new oil          trading network, the first step toward phas-
troleum (BP); Sir Phillip Watts, chairman of    fields.                                           ing out fossil fuels.
Royal Dutch Shell before he was forced to
resign in a scandalous overstatement of oil          The obvious answer is emissions trad-             The White House has signaled that it
and gas reserves; George David, CEO of          ing. That’s a way government forces con-          opposes the bill because it requires “deep
United Technologies Corporation; and John       sumers to pay for emissions by 1) legislating     and immediate cuts in fossil fuel use” to meet
G. Drosdick, CEO of Sunoco. Ironically,         a limit (“cap”) on total allowable emissions;     an “arbitrary” goal that would drive up house-
Sunoco is the restructured successor to Sun     2) permitting companies to emit more than the     hold energy bills and gas pump prices.
Oil, the source of the $3.7 billion endowment   cap by buying “tradable emissions credits”        Claussen’s assessment: “The bill would es-
that powers the Pew Charitable Trusts’ op-      from 3) companies that emit less than the cap     tablish ambitious and binding targets for
position to fossil fuels.                       and 4) allowing both to continue emissions        reducing U.S. greenhouse gas emissions,”
                                                under a government regulatory scheme.             she told a Utah audience. She also used the
     BELC has no mission statement, but its                                                       word “mandatory” four times in seven para-
pronouncements show its solidarity with the          Companies might also get credits for         graphs.
Pew Center: “The members of the BELC rec-       pumping CO2 into holes in the ground or for
ognize that the risks and complexities of       planting trees that absorb the CO2—called              McCain-Lieberman came to a Senate vote
climate change are so important that we must    “carbon sequestration,” which might explain       in October 2003 and lost 55-43. The Pew
work together to meet this challenge.” BELC     why Weyerhaeuser, “the tree growing com-          Center’s Claussen put on a happy face, tell-
lists four “beliefs” it shares with the Pew     pany,” joined the BELC. In other words, you       ing the Washington Post, “It really means
Center:                                         can sell a ton of carbon dioxide that you         that the people in this country and many in
                                                didn’t produce to someone who produced a          Congress are interested in our doing some-
    • Enough is known to take action            ton too much—for cash—and the govern-             thing about climate change.”
    now.                                        ment doesn’t put either of you in jail. If you
                                                have lower emissions when the game starts,            Kyoto—one step at a time.
    • Businesses should reduce emis-            you win. As in any Ponzi scheme, the player
    sions and invest in new technol-            who joins the game last loses most. That may      Conclusion
    ogy.                                        explain why BELC has 38 corporate members.             Behind Claussen’s remarks stand hun-
                                                Perhaps they dream of being energy brokers        dreds of fossil fuel opponents ranging from
    • “The Kyoto agreement represents           overseeing a global trading network and leap-     the huge and famous Sierra Club to the small
    a first step in the international pro-      frogging ahead of other producers: it’s easier    and obscure National Religious Partnership
    cess, but more must be done.”               brokering paper than drilling for oil or gas.     for the Environment, from the Energy Foun-
                                                                                                  dation, with its MacArthur, Rockefeller,
    • We can address climate change                    The system can be imposed one region       Packard and Hewlett foundation colleagues,
    and sustain economic growth with            at a time—New York Governor George Pataki         to the Pew Center for Global Climate Change,
    “reasonable policies, programs and          is currently working to create a regional mar-    with its Business Environmental Leadership
    transition strategies.”                     ket in which power plants can buy and sell        Council.
                                                carbon dioxide credits—but a global scheme
     The Center showcases BELC star power       requires a comprehensive international sys-            And behind them stands the Pew Chari-
to praise companies that lower their green-     tem of government controls over CO2 and           table Trusts.
house gas emissions. For example, “In 1998,     other greenhouse gases.
BP targeted a 10% reduction from 1990 levels                                                          The public needs to know.
in operational greenhouse gas (GHG) emis-       The Pew Network: Power and
sions. Having already lowered greenhouse        Pressure                                               Ron Arnold is Executive Vice President
gas emissions by 10 percent, BP has now              The Pew Charitable Trusts’ CEO Rebecca       of the Center for Defense of Free Enterprise,
committed that net emissions will be at these   Rimel and Environment Program director            a free-market think tank based in Bellevue,
reduced levels at the end of the decade.”       Joshua Reichert are well aware of these intri-    Washington.
                                                cacies and use such corporate self-interest to
     Two BELC member companies—BP               promote their goal of phasing out fossil fuels.
(UK) and Royal Dutch Shell (Netherlands)—       The main reason the Trusts changed its tax
are within the European Union, which has        status was to be able to lobby, and climate
ratified the Kyoto treaty, so their chairmen    change legislation is clearly a prime target.

May 2004                                                                                                                                      7
Foundation Watch

President Bush’s re-election campaign and the Republican National Committee filed a complaint with the
Federal Election Commission charging that Senator John Kerry’s presidential campaign is illegally coordi-
nating political advertising with anti-Bush “527” political committees, including, the Media
Fund and America Coming Together. Said RNC Chief Counsel Jill Holtzman Vogel, “Senator Kerry, who
supported the Bipartisan Campaign Finance Reform Act, is now the beneficiary of the single largest
conspiracy to violate campaign-finance laws in history.” The GOP charges the Media Fund and with spending nearly $10 million in anti-Bush ads since Senator Kerry clinched the nomina-
tion on March 2. One Media Fund ad explained Kerry’s tax plan before he made it public., the Internet-based liberal advocacy group, is capitalizing on former White House advisor
Richard Clarke’s allegations that the Bush Administration ignored terrorism threats before September 11.
In March, MoveOn’s political action committee sent an e-mail fundraising appeal to the group’s two million
subscribers. “Help us get Clarke’s comments in front of the American people in a new hard-hitting ad,” the
letter states. In less than three hours, the MoveOn appeal generated $1 million from 23,000 donors.

The H.J. Heinz Company is distancing itself from Teresa Heinz Kerry and the Heinz Endowments,
which she chairs, after receiving phone calls from consumers vowing to boycott company products.
Teresa Heinz Kerry and her children own more than three percent of the company’s outstanding stock.
However, the company explains that it makes no contributions to the Endowments whose wealth is de-
rived from the estate of the late Senator H. John Heinz. His grandfather founded the Heinz Company. The
company sent nearly 50 letters to radio and television talk shows to counter the impression that H.J. Heinz
is aiding the Kerry campaign and the Heinz Endowments. Said company spokeswoman Debbie Foster,
“It’s just crazy. We haven’t been involved in politics since Morris the Cat for President in 1988” – a refer-
ence to a spoof ad campaign H.J. Heinz ran that election year. The Endowments give to major environ-
mental groups such as the Natural Resources Defense Council and Environmental Defense that lobby
against the Bush Administration’s policies. They also make grants to the controversial left-wing Tides
Foundation and Tides Center—$4.3 million between 1995 and 2001. The Tides Foundation funds many
anti-war groups, including September 11 Families for Peaceful Tomorrows, an organization of some
family members that has been critical of the Bush Administration’s response to terrorism.

The April election of new board members to the Sierra Club exposed bitter divisions within the 700,000-
member environmental organization over immigration and other issues. The Club voted to replace five
members of the 15-member board, who serve staggered three-year terms. But due in part to the
organization’s lax rules which allow anyone who pays the $25 membership to participate in the election as
a voter or board candidate, this year’s elections generated numerous candidates representing opposing
views. The most contentious centered on immigration. The Sierra Club, like most of the environmental
movement, views population growth as an ecological threat and supports policies that slow or cut global
population levels. The Club has long been on record as endorsing a stable U.S. population to reduce
alleged strains on the environment. But the Sierra Club leadership has rejected endorsing policies to limit
U.S. immigration rates to avoid offending ethnic lobbies within the liberal movement. In 1998, the Club
voted to remain neutral on the question of immigration to avoid dividing the organization. But since then,
several board members have been elected who favor restrictions, such as former Colorado Gov. Dick
Lamm. To counter the anti-immigration faction, Morris Dees of the Southern Poverty Law Center
decided to run as a candidate to the board, urging members to “vote against the greening of hate.”

8                                                                                                 May 2004

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